Building Cooperative Workplaces Bill to reduce FWC workload pressures, but carries risks for employers

Newly legislated amendments to the Fair Work Act aim to streamline Australia’s workplace relations system, but whether the changes strike the right balance remains to be seen.

The bill

The Workplace Relations Legislation Amendment (Building Cooperative Workplaces No. 1) Bill 2026, which amends the Fair Work Act 2009, was introduced to Parliament in early June and, as of Tuesday (30 June), has passed both houses.

It gives the Fair Work Commission more power to resolve dismissal and termination disputes faster (including deciding some matters on written submissions), reduces procedural delays, and helps curb unmeritorious or repetitive claims, adjusts enterprise bargaining rules to make multi-employer bargaining easier in some cases, introduces a high-income threshold for road transport contractors, and makes governance/reporting changes affecting construction-sector industrial bodies.

Speaking at the time of the bill’s introduction, Minister for Employment and Workplace Relations Amanda Rishworth said the amendments will help the Fair Work Commission allocate its time and resources more efficiently, “so it can continue to effectively perform its vital role as our national independent workplace relations tribunal”.

“This will mean individual matters can be dealt with more quickly, so workers and employers can get more timely resolutions to their issues and enable the commission to respond to challenges presented by the increase of artificial intelligence and paid agents,” she said.

“Importantly, this will ensure the commission can continue to effectively perform its crucial functions, such as setting minimum wages, adjusting awards, approving enterprise agreements, and resolving disputes.”

Implications for FWC

As pointed out by Kingston Reid partner Lucy Shanahan, the changes allow certain disputes to progress to conciliation more quickly, enabling some matters to be determined “on the papers” with party consent, and provide the Fair Work Commission with stronger tools to deal with vexatious claims. In addition, she said, general protections claims involving dismissal can be conciliated before any jurisdictional question about the termination of employment is determined.

Changes have also been made requiring that model terms in workplace determinations must be no less favourable than a term of an enterprise agreement dealing with the same matter, Shanahan went on. “This means that the model clause will not automatically apply in a workplace determination if there is no agreement on the subject matter of a model clause. These provisions apply retrospectively, which means current workplace determinations can be amended on application,” she said.

The reforms will assist FWC, Harmers Workplace Lawyers executive counsel and team leader Amy Zhang said, to address the “significant workload pressures affecting its operations”, driven by the rise in AI-assisted applications by employees.

“The reforms will also result in greater cost savings and efficiencies for employers responding to FWC claims, in that the commission will be able to deal more quickly and efficiently with certain matters, deal with unmeritorious and frivolous claims more proactively, and employers won’t need to go through costly jurisdictional hearings before having the benefit of a conciliation conference,” she said.

But while the reforms will help with the commission’s resourcing issues, “more needs to be done”, Zhang said, and in particular, more funding needs to be provided to the commission, to address the commission’s unsustainable workload and resourcing pressures, “which result in delays in matters being progressed and impact on the quality of services, in particular in the area of conciliation conferences, which businesses are finding are rushed and not conducive to settlement of disputes”.

“Nevertheless, these reforms, together with the commission’s own procedural reforms, should go some way in addressing efficiency issues and make the system better for all participants,” she said.

“Given the focus on early triage of claims, and given ongoing changes within the commission, getting early advice will be essential for employers to strategically manage and resolve claims.”

Flow-on effects for enterprise agreements

Elsewhere, Shanahan said, the new laws pave the way for the Commonwealth to prefer businesses with enterprise agreements in procurement and grant processes.

“These procurement amendments may ultimately have greater commercial significance than the Fair Work Commission reforms,” she said, “as they create a legal framework that will enable enterprise bargaining requirements or preferences to flow through Commonwealth contracting and subcontracting chains”.

According to Pinsent Masons’ head of employment and reward in APAC, Aaron Goonrey, the bill makes enterprise bargaining a commercial necessity for employers who want to compete for government work.

“The government’s stated aim, to increase participation in enterprise bargaining, may be considered a legitimate policy objective, but whether this bill strikes the right balance is another question entirely,” he told HR Leader.

“Using procurement leverage to effectively compel enterprise bargaining, rather than making it genuinely attractive, risks pushing employers into agreements they are not prepared for, which, in my experience, rarely produces the cooperative workplaces the bill’s title promises.”

“The title of the bill is something of a misnomer, in that workplaces built on procurement pressure rather than genuine mutual interest are often not cooperative environments.”

Employers need to act now, Goonrey went on, rather than wait for the Secure Jobs Code to crystallise how the preferencing power will operate in practice.

“As a starting point, businesses should audit their current industrial arrangements and identify whether they hold an enterprise agreement that also covers a relevant employee organisation. Those without agreements should model the commercial risk of being at a disadvantage in future tender processes. Supply chain participants, particularly subcontractors and subconsultants, should review their contracts for any downstream obligations that could flow from head contractor requirements,” he said.

The reforms are sector-agnostic, he said, extending well beyond construction into defence, aged care, technology, and professional services.

“No employer reliant on Commonwealth work can afford to treat this as someone else’s problem,” he said.

Reflections and moving forward

For Dentons partner Kate Walawski, the bill, “in my view, broadly strikes a pragmatic balance”.

As a package, she said, the amendments reflect the government’s commitment to provide a workplace relations framework that enables the commission to perform its functions more efficiently by removing unintended and unnecessary rigidity from the Fair Work Act.

“The most significant immediate concern for all employers should be the implication for their internal dismissal-related processes. In practical terms, employers who previously relied on the jurisdictional objection pathway as a first line of defence will no longer be able to halt proceedings at that early stage,” she said.

“Consequently, it is critical that employers have robust, well-documented performance management and dismissal procedures in place before a termination occurs.”

On the expansion of the commission’s delegation powers, which will see accelerated conciliation timelines, Walawski continued, “employers should expect a shorter window between a claim being filed and the matter escalating to formal proceedings, placing a premium on early legal engagement and again thorough pre-termination process documentation”.

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Jerome Doraisamy

Jerome Doraisamy is the managing editor of Momentum Media’s professional services suite, encompassing Lawyers Weekly, HR Leader, Accountants Daily, and Accounting Times. He has worked as a journalist and podcast host at Momentum Media since February 2018. Jerome is also the author of The Wellness Doctrines book series, an admitted solicitor in NSW, and a board director of the Minds Count Foundation.